South Coast Plaza men's store was completely remodeled from top to bottom not long ago and is a top performer that has been fully integrated into the regular store via a sky bridge that links the two buildings at the 3rd floor. The men's business is still so strong that they actually have the men's overflowing into the main building with suits there in probably the only full service, fully staffed dedicated department I've seen left at Macy's with sales people who have been there decades.c95xrk wrote: ↑March 26th, 2024, 5:20 pmI'd expect it is more likely they'll receive offers on one of the flagship secondary stores, like the South Coast Plaza men's store or Valley Fair's men's and home store, before some of the other secondary stores go away. And for those curious, the company does publish a list of stores with their respective land status (owned/leased/ground leased) on their investor website, if you want to peek: (https://www.macysinc.com/investors/fina ... fault.aspx).ClownLoach wrote: ↑March 26th, 2024, 4:35 pm They have made it clear they will consolidate as opportunities come along. As stated earlier they are negotiating to finalize plans for consolidation in Mission Viejo where the women's building will be replaced by luxury apartments. If they own the building there is no benefit to consolidation without replacement tenants since the stores are all cash flow positive. But they have already stated on investor calls that wherever you see two in a mall, except for flagship properties (South Coast Plaza for example), they are open to taking offers.
And the rest isn't an official list but rather a speculative list. So Santa Maria is probably owned and cash positive, and I would imagine zero chances the property is going anywhere. Lots of population growth to feed comp sales, but lots of bare dirt to build on for decades before anyone thinks of redevelopment of the mall. So oddly enough I could see Santa Maria slipping through. If it's cash positive, comp positive, not high shrink, and zero chance of anyone buying it or subleasing it then zero reason to close it. A lot of big box retail went up there in the last 5 years or so, upsized Costco and Lowe's, Dicks, and others.
As for the speculative aspect of the list, I still think it's 90% spot-on. I'm assuming they won't start shuttering stores until after the holidays, but I assume the picture will become clearer as they look to offload whatever real estate they own.
The entire SCP three store complex is basically the new flagship of the West Coast. Also the management of SCP bought back the Sears building over a decade ago which was the top grossing store at Sears at the time and was actually very profitable. When it closed it still had ample appliances and TVs and such, that closing probably gave a small cash boost to Sears but was truly the beginning of the end as their death spiral began at that moment. They still have not been able to sublease or do anything with it, and basically have eaten a $200 million purchase. So there's about dead zero chance of anything happening with the Macy's building because the decade long closed Sears facility in a great location effectively devalues any other department store box there. Macy's Inc via the Bloomingdales division has heavily invested into SCP and has created an incredibly successful food court of primarily Asian restaurants inside that building and I expect they will duplicate the concept with the Macy's building.
As far as "trying to offload the real estate they own" I do not see that being the long term strategy of the current management. Such strategies will be the end of the company. It is apparent that they are recipients of investments from the major mall owners as they have been unusually resistant to the concept other than occasionally throwing the agitants a bone like closing Union Square which at this time is a declining asset. But the stripping of all assets is a strategic move for the liquidation of the company and they do not seem to wish to do that. Remember that although they have these agitants and activists who want to see the books because they think they can pillage the company, that doesn't mean they won't like what they find. Owning assets means they have leverage available, they can borrow money as needed and have the large credit lines necessary for their highly seasonal businesses and they secure them with these assets. Retailers like Macy's in stagnant sectors that have tried to unload assets wind up being unable to find enough credit to actually grow their business and then they implode. I cannot imagine that management hasn't built what amount to poison pills by securing credit operations to these properties. There is not a snowballs chance in Hell that there is no loan or other line attached to Herald Square for example, something is secured to it and that would be a deterrent to the vultures.
I have not had the time to dig through the link but I expect it will contain a similar arrangement of other retailers with combination of leased and owned and leased-back. The "crown jewels" will be owned. Most of what is good volume surprisingly will be leased or have undergone a leaseback already. And the rest of the owned will be the lower end of the volume spectrum in "low B and C tier malls" which would deliver minimal returns if sold and become unprofitable instantaneously if leased back. The vultures waiting at the door just want the crown jewels and they want them now because they anticipate a major downtown in the commercial real estate market and know that they probably can't get a higher return on their sale than right now, ongoing store business be damned.
Macy's is unusual in that they still attract good traffic and in their current form they do make money. They have neglected the entire company under the previous leaders by allowing the mall industry to steer their course as they have closed hundreds of stores mainly to get out of the path of the wrecking ball, bulldozer or in some cases board up crew. It sounds like the new management actually gives a damn about the business, that they have a track record that built a playbook for success on the Bloomingdales side and they want to apply that playbook to the Macy's brand. The outside activist vultures obviously are very upset as the last thing they want to see is any investment, any improvement, any new life breathed into Macy's. They want to come in instead and gut the company in a matter of days, making off with the billions in real estate assets they have spent the last century acquiring then forcing them into leasebacks on what will be dead and dying properties which will doom the entire enterprise and have it in bankruptcy within a couple years.